Collective Purchases *

The business format of “collective purchases” is new to Brazilian consumers, but the first companies here who have started using this business model have already surpassed more than one million registered customers after only a few months in business. Recently, more than 20 new similar ventures have started operations in Brazil, and these companies are eyeing a market where investors expect to earn millions. As the public becomes acquainted with this new business model and it gains more adherents, new collective purchase competitors appear.

The collective purchase business model is simply this: In partnerships with businesses (especially food, entertainment and beauty supplies), websites provide daily offerings with discounts ranging from 50 percent to 90 percent. With low initial investment, the collective purchasing websites please consumers with their steep discounts, and they greatly benefit the companies who promote their products and services to the public with far greater exposure through the Internet.  In general, consumers are young and hungry for good prices. So the secret to collective purchase organizations is to know the behavior of customers and thus offer appealing deals. For the companies who provide the services and products, it is a great way to publicize their brand and make the companies better known to the public.

Obviously, to have this business model work smoothly, the customer must be satisfied. Thus, the companies considering entering the collective purchase partnerships using shopping websites to promote their brands need to have adequate structure and organization to meet a large, fast, and demanding audience. After all, it is the name of the company that is at stake.

Despite the success of this business model in recent months in Brazil, the model is not exactly new here. It was first proposed in the year 2000, with Mobshop website, for example. However, at that time it failed because the security environment of web shopping was extremely fragile. Also, the number of Internet users was much smaller in Brazil at that time. The format currently working so well here is based on the model of collective purchasing that arose in the U.S. in 2008.

However, with the idea of collective purchasing services becoming a big hit in Brazil, there are some things to keep in mind in order to avoid your “good deal” turning into another headache and more hassles. For those readers who are already enjoying collective purchasing, as well as those tempted by the steep discounts, here are few easy hints: 1) Pay attention to the coupon expiration dates; 2) Beware of exaggeration, whereby the temptation for discounts often leads buyers to purchase a product on impulse; 3) Make sure the price is really worth it; 4) Read the terms of use that establish rights and obligations of the customer. Now that you know a little more about collective purchasing services, be sure to check out the offerings in your city and enjoy the good shopping.


* Article published on Curitiba in English.